Monday, August 3, 2009

Another Good Day

Writing about this market is quite a repetitive task lately. Once again we stayed strong almost all day with just a couple minor dips. The bears tried to fade the open but that didn't last long and they couldn't manage to pull off a weak finish like they did on Thursday and Friday. Breadth was impressive with the NYSE producing 2,500 gainers to only 550 decliners. All major sectors were in the green.

In the 16 trading days since the Meredith Whitney upgrade of Goldman Sachs, the Nasdaq has had about 14 days just like that. It has just been relentlessly bullish, which is great if you have been positioned bullish but not so easy if you have had any doubts at all about the spectacular ascent of the market. There are always some folks who are bullish no matter what, especially in the media, and they are loving this market but the legions who want some sort of rest are growing.

This steady rise has created a market that is too strong to short but possibly too extended to buy, and that makes for lots of frustration and plenty of underlying support. If you want to play you have to be willing to chase and the folks who have done best have stuck with it and not taken gains too soon. That can only work for so long and carries some pretty substantial risk, but it is what it is.

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